But the Howard League for Penal Reform says private companies, not charities, are the real winners under the scheme

Charity, voluntary or social sector groups are involved in 20 of 21 consortia due to be awarded payment-by-results contracts for the management of low and medium-risk offenders through the Ministry of Justice’s Transforming Rehabilitation programme.

But the crime-reduction charity the Howard League for Penal Reform said that private companies were the real winners rather than voluntary groups, and that the MoJ was overseeing the destruction of a public service.

The MoJ has today announced its preferred bidders to take over 21 community rehabilitation companies. Each covers a different region of England and Wales; all have operated in what a spokesman for the MoJ called "shadow form", being run by the public sector, since their creation on 1 June.

The CRCs replace probation trusts and are responsible for a total of 200,000 offenders nationwide. High-risk offenders will continue to be managed by the National Probation Service. The contracts are expected to be worth up to £450m in total.

The MoJ spokesman said financial agreements in each contract are still being negotiated.

The CRCs will have to draw up plans for rehabilitation within days of prisoners entering prison, and work with them for a year post-release. They will be paid in full only "if they are successful at reducing reoffending, helping to drive innovation and getting best value for taxpayers", an MoJ statement says.

The statement says there had been "strong competition for each of the 21 CRCs, with bids showing real innovation". Final negotiations with the preferred bidders will now begin, and providers should start delivering services in early 2015.

Six of the contracts will go to the private company Sodexo Justice Services, working in partnership with the crime-reduction charity Nacro.

Five will go to Purple Futures, a partnership led by the private firm Interserve, along with the charities Addaction, P3 and Shelter, and the social enterprise 3SC.

Three go to Working Links – described by the MoJ as "a public, private and voluntary company" – in partnership with Innovation Wessex, a probation staff mutual.

Only one of the 21 preferred bidders, Seetec Business Technology Centre, bidding for Kent, Surrey and Sussex, has no charity, voluntary or social sector involvement. Only one, in Durham Tees Valley, has no private sector involvement – the Achieving Real Change in Communities Community Interest Company, which is a joint venture involving eight organisations, two of which are registered charities.

The MoJ said that three-quarters of the 300 subcontractors named in the preferred bid were voluntary sector or mutual organisations. Of 1,000 further organisations that have come forward to work with the chosen providers, it said, 700 were voluntary, community or social enterprises.

Frances Crook, chief executive of the Howard League, said: "As we expected, the big winner of the probation sell-off is not the voluntary sector but large private companies run for profit. The Ministry of Justice will claim it has created a diverse market, but Sodexo and Interserve are the companies running half of all the contracts. A public service is being destroyed without any evidence that the fragmented landscape created will perform any better or help make communities any safer."

Andrew O’Brien, senior policy officer at the National Council for Voluntary Organisations, said: "We are pleased to see that government appears to be learning from the past and supporting the voluntary sector to play a key role in the delivery of this reform." However, he urged caution, saying: "This is only the beginning of a long process and we need to see how these arrangements work in practice, particularly at the local level."

Chris Grayling, the justice secretary, said: "This announcement brings together the best of the public, private and voluntary sectors to set up our battle against reoffending, and to bring innovative new ways of working with offenders. In particular, I am really pleased that we will be deploying the skills of some of Britain’s best rehabilitation charities to help these offenders turn their lives around."

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